Changing shopping trends of the pandemic: What’s in and what’s out

Shoppers have stopped snapping up certain products they were going nuts for last year and started spending their significant savings elsewhere.

Australia’s pandemic-induced shopping spree was the biggest retail spending splurge in a decade, but sales are forecast to pull back dramatically in 2021-22, with apparel and household goods tipped for the greatest slowdown.

According to the latest Deloitte Access Economics Retail Forecasts report, retail spending for the 12 months to June 30 is on track for a hefty 5.9 per cent growth.

“Spending options have been limited, and with many households having cash to burn, consumers flocked to retail,” principal author David Rumbens said.

The forecast for next financial year is a more modest 0.9 per cent gain, with non-food industries likely to feel the greatest slowdown in spending, particularly apparel and items for the home, which went gangbusters last year.

“The mad rush consumers undertook (buying clothing) in the second half of last year meant by early 2021, wardrobes were full, and pockets were a little lighter, leading sales volumes to fall 0.7 per cent in the March quarter,” the report read.

During the March quarter, department and discount department store sales grew 0.6 per cent. Picture: Bianca De Marchi / NCA NewsWire

“A large driver for the contraction … was the significant rise in prices over the quarter – at a scale not seen across other retail categories.”

Sales volumes for household goods, including electricals and hardware, fell 1.7 per cent over the March quarter, with investment in the home becoming less of a priority as lockdowns became less common.

“The ability for consumers to work and socialise outside the home has seen demand shift away from these retailers into other categories including catered food and broader spending on services,” the report read.

“That said, household goods spending is still up 12.5 per cent for the year to March.”

Another significant slowdown was in the specialty food and liquor category, with sales easing by 2.7 per cent over the March quarter.

The shopping frenzy for hardware goods has waned. Picture: Gaye Gerard / The Daily Telegraph

That said, specialty food retail was still up 5.6 per cent from last year – an indication consumers may be sticking to spending habits they picked up in 2020.

Mr Rumbens noted household budgets benefited last year from substantial fiscal stimulus, but this tap was being turned off.

“Luckily the war chest of savings built up for many over the past six months is starting to be drawn down, providing some buffer for household spending,” he said.

“Australian consumers have more options for spending with the easing of restrictions, and a need for social contact is supporting eating out and other activities at the expense of other retail spending.”

Deloitte said the shift back to dining out was happening faster than originally expected as consumers sought to catch up with friends and family, and get out of their homes, with cafes benefiting in particular.

The report follows Australian Bureau of Statistics retail trade figures earlier this month that showed overall growth of 1.1 per cent in April, compared to March, and a whopping 25 per cent surge over the year.

Originally published as Changing shopping trends of the pandemic: What’s in and what’s out